I've been trading for a little over a month now with reasonable success through a largely bearish market. I knew very little before I began, but have since picked up a number of key pieces of advice from the community and my own experiences. If by sharing these lessons, I can save even one of you some money then I'm happy with that. Here goes...
1. Don't FOMO Buy
For those of you living under a rock and don't know, FOMO stands for the Fear Of Missing Out, and is one of the toughest, yet most important things to learn when trading. Particularly when involved in volatile cryptocurrency markets, which can see 10-20% fluctuations in a matter of minutes, it's extremely tempting to jump on board when you start to see those long green candles appear. Unfortunately, the crypto space is currently highly manipulated by whales and bots who can influence the short term price movements to their benefit. Those sharp increases can, and often do turn to equally sharp declines in a pump and dump leaving those that bought the FOMO out of pocket (unless you're very lucky of course).
FOMO run-ups are unsustainable, we're looking for organic and organised growth appearing from recognised charting patterns. This leads us nicely onto my second point.
2. Wait for Breakout Confirmation
You've found a chart pattern that's signalling a bullish movement. You think to yourself 'if I get in now I can maximise my profits', and that may well be the case. But I've learned that not all chart patterns result in the outcome they suggest or you're hoping for. Wait for that confirmed breakout of the wedge, or completion of the head and shoulders before buying, and while you'll probably be buying at a slightly higher price, your success rate will go through the roof.
3. Listen to Others, but do your own Research
There are a bunch of experts out there who provide fantastically complete and complex Technical Analysis', and all for free. Whilst you're learning, use these people to help you identify potential markets to enter, but for goodness sake do your own research to back up their claims!
4. Better to be out a market wishing you were in, than in a market wishing you were out.
While neither scenario is ideal, and sitting on the sidelines watching an asset rise can leave you cursing, being in a market having missed your get-out point, watching the price drop and your money drain away hurts a hell of a lot more. If you're not certain, stay out and wait.
5. If in Doubt...HODL!
Trading is hard, and there's a reason why the people making money have years of experience and knowledge around the market. While losing bits here and there is inevitable, and making mistakes is par for the course, if you find yourself losing more than your making, simply pick a few cryptos and hold on tight for a few years. You're sure to make a hell of a lot more money that way!
Any other top tips you've found useful, please share in the comments.
Also check out my articles on Technical Analysis for Beginners:
Continuation Patterns
Reversal Patterns
Bilateral Patterns
Cup and Handle
Bollinger Bands
Relative Strength Index (RSI)
Moving Average Convergence Divergence (MACD)